Convergence between telecoms, IT,
consumer electronics, broadcasting and the content sectors is now starting
to have a real impact in the UK. This is a journey rather than a
destination as ever more bandwidth becomes available, enabling UK industry
to capitalise on the opportunities.
And these opportunities are immense. Around the world, countries are
competing for leadership in the global knowledge economy. Success will
depend upon how quickly countries can leverage the opportunities for
innovation, investment and economic growth presented by convergence. We
have strengths in telecoms, IT and the creative industries; so with the
right policy framework; and a converged approach to regulation, the UK
could be a real winner. If we fail, we will have only ourselves to blame.
Convergence drives an ever faster world where information and content are
increasingly digitised, personalised and accessible 'on demand' via
multiple fixed and mobile platforms and devices. 2005 is a watershed as we
see the acceleration of broadband with more compelling and engaging
content and applications.
The UK’s broadcasters, ISPs, mobile operators, content, software and
electronics companies are all rising to the challenge. Telecommunications
providers are starting to offer broadcast services alongside of
traditional TV. Very soon, consumers will be able to watch or listen to
audiovisual content anytime, anywhere, and on all technical platforms (TV
set, computer, mobile phone, personal digital assistant, etc.). Each time
the networks press the broadband accelerator pedal, the content community
responds, which in turn encourages broadband adoption. The exciting
reality of convergence is a virtuous circle.
UK consumers have a healthy appetite for new services and devices. Already
63% of households have digital TV, whether via terrestrial, satellite,
cable or DSL - the highest national penetration in the world. The recent
announcement of digital switchover maps the way for households to access
the wide range of services on offer from digital TV.
Switching off the analogue signal will allow the reach of digital
terrestrial to be extended to the 1 in 4 UK households who can't get
digital TV through their aerial at the moment. It will also free up
spectrum for new, innovative services: like mobile TV, high-definition TV
and wireless broadband.
An example of the new application of convergence is eBay's acquisition of
Skype. Deloitte predicts that worldwide convergence will lead to a massive
1 trillion dollar shift in valuations and revenues in the converging
sectors by 2010. Convergence presents both a threat and a huge opportunity
for companies - both large and small - across a wide and fast moving
sector of the UK economy. And at stake here is also the competitiveness of
the UK as a whole.
Our converged world also contributes hugely to the UK’s intellectual and
social capital by unleashing the creativity of individuals to participate,
share and contribute content for entertainment and learning on a
proliferation of existing and new digital platforms. For instance, ‘BBC
Creative Archive’ enables viewers to archive audio-visual material as an
opportunity to be creative in new ways.
As digital devices proliferate and the Digital Home takes shape, how can
we make sure that industry puts the consumer at the heart of its
strategies to exploit the benefits of convergence? Easy access to the
plethora of new content must be available to all demographic groups and
not just the Internet savvy. This could be about doting grandparents
receiving e-mails with photo attachments from their family in distant
places and seamlessly transferring photos from the PC or their mobile to a
widescreen television in the living room, proudly sharing the experience
with friends. The alternative is a world in which the world shrinks for
some just as it expands for others.
The Government’s approach is to help business and the public make the most
of convergence and there are a number of important actions to facilitate a
more converged society.
First, convergence presents new challenges to the regulatory and policy
framework that was designed for the analogue world. The DTI is working
with the Broadband Stakeholder Group (BSG), Digital Content Forum, several
trade associations and the EU to influence the direction of policy so that
we have modern and flexible rules that meet the needs of reality in the
future.
Second, Ofcom is a regulator for enabling as well as protecting. It is
five regulators merged into one, and has the role of helping our
converging ICT industries grow as the pace of international competition
heats up, as well as protecting the public in general and the vulnerable
in particular. I argued for an entrepreneurial regulator when I designed
the Gangmaster legislation and I’m pleased to recognise exactly that
characteristic in Ofcom. Any new EU regulatory frameworks must help the
growth of new innovative services, especially as the technology
convergence between the internet and traditional broadcasting becomes a
reality before our very eyes.
Third, Government and industry can work together effectively on digital
inclusion and digital literacy campaigns. This requires us to spread the
benefits of convergence across the whole UK – to urban and rural
communities, to all socio-economic groups and to individuals, whatever
that individual’s level of digital sophistication.
Fourth, we welcome the transfer of knowledge throughout the convergence
value chain and I commend the recent work by the Intellect Digital
Convergence Council, culminating in their report ‘Capitalising on
Convergence’. Government is willing to play an active part here in raising
the UK’s convergence readiness and accelerating growth. There is much
learning and trusting that we all need to go through in a world where new
industries need to work together for the first time. Also I encourage you
as key shapers of convergence to fully involve SMEs, which are often more
innovative and can move faster than larger companies, and to social
enterprises which demonstrated a capacity to move rapidly when big
providers were dragging their feet. Cybermoor outpaced BT for example.
Fifth, as one of the key actions of the UK’s Digital Strategy for which I
act as Ministerial champion with the full backing of no. 10, DTI is
raising awareness across government departments of the potential of
innovative broadband content, for example, audio-visual media, delivered
on multiple platforms to enhance the delivery of public services. That has
to be pursued in partnership with the creative and ICT industries.
Sixth, the DTI’s Technology Programme provides funding. In a recent
competition, bids for collaborative R&D between the science base and
industry were invited in the area of Pervasive Computing. Pervasive
Computing is directly linked to convergence and I’m pleased that a number
of organisations represented here today have received DTI grant offers. I
hope the funding will raise the UK’s R&D capability to exploit
convergence. Industry really does need to grasp the nettle, thinking 3-5
years out on convergence – going beyond the pressing, immediate challenges
of today.
Finally, we are actively engaging the 9 English Regional Development
Agencies (RDAs) and Devolved Administrations on the convergence agenda.
They are key partners for the industry. The RDAs have a combined annual
budget of £2.1 billion with responsibility for enterprise, innovation,
productivity and inclusion in their regional economies. As Minister for
the regions I am asking my Ministerial colleagues to work as a team with
the RDAs and I have asked the RDAs to provide an “industry lead” for each
sector. The point is that the economy of England needs to be driven at the
regional level but we need joined up thinking to inform their work.
During the UK’s Presidency of the EU we have been focusing on the
contribution of ICT to economic growth and productivity, through our work
on the i2010 agenda. The EU has to compete within a fiercely competitive
and converging global ICT economy. How do we do that?
Information and communication technologies play an absolutely crucial role
in achieving the Lisbon objectives - 40% of productivity growth in the EU
over the second half of the 1990s can be attributed to ICT. ICT is the key
facilitator for increased productivity and innovation across the private
and public sectors. But it’s not happening fast enough.
The i2010 reflects our national priorities in the regulatory and policy
area, in the inclusion area and in R&D because we need to establish the
strategic direction of EU policy in these areas in the next five years.
The overriding objective is to ensure that ICT makes an effective
contribution to EU growth, jobs and competitiveness. Without that
contribution the EU cannot meet its economic goals.
By the end of our Presidency, we hope to achieve a broad consensus on the
key goals that need to be the focus of our attention, and the key
milestones on the road to achieving these, so that the important benefits
of ICT to the Lisbon agenda are fully realised and so that the digital
revolution truly delivers for the citizens of Europe in the 21st Century.
There are a number of important proposals at EU level, the outcome of
which will have a key impact on the ability of the EU to really leverage
the competitive and innovation benefits from convergence.
Next year, the Commission will review the Electronics Communications
framework to see what has worked well and what needs to be changed in
order to take into account of convergence in the electronic communications
market. The goal of the review must be to ensure that we get to the stage
of sustained competition without the ongoing regulatory intervention so
that emerging markets are not subject to inappropriate regulation, which
would stifle innovative products and services.
The European Commission will need to ensure that all Member States fully
implement the framework package including the market reviews in a timely
fashion. More needs to be done to guarantee the independence and
strengthen the powers of the national telecom regulator in each Member
State with a focus on competition and growth. That is not yet the reality.
And, the Commission has recently adopted three Communications setting the
scene for the use of the radio spectrum, a critical resource of the
Information Society. This policy includes the coordinated introduction of
a market-based approach to spectrum management in the European Union,
covering a substantial range of frequency bands by 2010. To achieve this
the Commission is proposing to strengthen the spectrum provisions in the
future regulatory framework.
Lastly, let us look at “Television Without Frontiers”. Convergence between
telecommunications and traditional audiovisual platforms is happening now
and will accelerate over the next decade. So the European Commission’s
proposed revision of the EU broadcasting regulation is an opportunity to
create a clear and effective framework for the future and which only
regulates where it is necessary to do so. The aim must be to enable the
content industry to innovate, to develop, and to compete effectively,
whilst also protecting consumers.
These are just three examples of European proposals in the telecoms,
spectrum and traditional broadcasting areas. Getting the legislation in
these areas right will be absolutely central to the ability for EU
industry to compete with the best in the world and to take full advantage
of the endless opportunities offered by convergence.
Now, let’s gaze into the crystal ball, at a truly converged world beyond
IT, telecoms and new media – when these sectors one day reach out to the
worlds of bioscience and nanotechnology. What comes to mind is the BT
vision of embedded sensors in the human body being monitored remotely and
being able to spot heart problems, cancers etc. Perhaps challenging, scary
and exciting all at the same time. Certainly raising social and moral
issues as well as technical issues to be debated by an informed and e-nabled
society. In the democracy of the future, convergence will have a growing
impact on society.
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